Pearson takes £326m stake in Brazil education group

Pearson, the education and publishing group that owns The Financial Times,
has bought part of a Brazilian education company for 888m reais (£326m).

By Rupert Neate

6:45AM BST 23 Jul 2010

Pearson, which also owns Penguin Books, has agreed to buy the "learning systems" division of Sistema Educational Brasilerio (SEB), as part of the FTSE 100 company's plan to expand its presence in south America.

Pearson

The deal will more than double the size of Pearson's education business in Brazil and includes an agreement that will ensure that SEB's remaining schools and higher education institutions remain "major customers" of Pearson.

The acquisition comes after Dame Marjorie Scardino, Pearson's chief executive, pledged to reinvest the company's £900m windfall from the sale of its majority-stake in market data provider IDC into expanding its education business in fast-growing economies.

Pearson said Brazil is one of the world's largest education markets with 56m students and an educational materials market valued at about $2bn. Pearson said it expects the new division to generate sales of about 160m reais this year.

John Fallon, chief executive of Pearson's international education business, said: "Given the size and growth prospects of its education sector, Brazil has been a focus for Pearson for some time. "[The deal] provides a platform to build a more significant Latin American business ad takes us further into the provision of broad-based integrated education services."

Alastair Reid, an analyst at UBS, said the acquisition was a "strategic positive" as it allows Pearson to "bulk up" its faster-growing international education business and expand into a high growth market.

The acquisition is Pearson's biggest-ever educational purchase outside of north America.